Uber took up an interesting “beer run” in late 2016. Partnering with Ottomotto, Uber completed a 120-mile freight delivery using a self-driving 18-wheeler truck. The package? 45,000 cans of Budweiser, moving from a weigh station in Fort Collins, Colorado to its final destination in Colorado Springs.

The technology for self-driving trucks has been steadily improving and this was the first major commercial demonstration of its ability. It represents not just new technology, but a new economic model, showing both how the shipping industry is changing and how OEMs must adapt to keep up.

The Importance of the Trucking Industry

In a country like the US that is so vast and yet so intimately connected to the global market, countless industries depend on the ability to move goods from one place to another. It is estimated that, as of 2012, trucks alone are responsible for shipping the following in a year:

8 billion tons of freight.

$13 trillion worth of goods.

70% of all US freight.

To put it in another perspective, roughly 1 out of every 7 people in the workforce is employed in the transportation system, in some way or the other. There are almost 3.5 million truck drivers in the US and another 5.2 million non-drivers who work in the industry. It is a booming business, and any change will have far-reaching repercussions.

Uber’s Demonstration: An Upcoming Economic Model

With its shipment of Budweiser, Uber has demonstrated that it is ready to change the rules of shipping. This is not the first time that we have seen trucks that are able to drive themselves – they have been at the forefront of autonomous technology longer than cars. In early 2016, a fleet of over a dozen autonomous trucks left from points in Germany, Belgium, Sweden, and Denmark and converged in the Netherlands. But there is a big difference between testing the technology and having actual proof of its commercial viability and Uber’s plan worked perfectly.

The most notable aspect of this plan is arguably that it was not just Uber’s. The technology belonged to a startup called Ottomotto, which had been working on fleets of self-driving trucks since January 2016. This marks a unique sort of partnership – more than just acquiring Ottomotto, Uber invested in them, putting $680 million into their technology over the summer of 2016 even though there is still a firewall between the companies in terms of process.

This type of partnership is a growing trend. Apple, for example, is no longer trying to produce a car and is instead focusing on software, suggesting that they may soon be looking for automotive partnerships. Ottomotto itself was founded by ex-Google employees who had been working on the company’s self-driving car project before venturing off on their own. The industry is flooded with startups — people who know technology or people who know automotive — pairing with companies that are experts in their field promises to be profitable for OEMs by enabling them to adapt to a new economy.

The Future of the Shipping Industry

These partnerships are especially relevant when it comes to the shipping industry. The Bureau of Labor Statistics estimates that we will actually need 21% more drivers in 2020, compared to 2010, and a growing industry means more partnerships and more scope for innovation. There will be a need for smart forklifts, pallet loaders, and other autonomous machines. Automotive knowledge and technology expertise will combine in fascinating ways to benefit both companies and their employees.

There is a lot of talk about self-driving trucks decimating jobs for many people, but OEMs can also partner with trucking companies to create flexible, streamlined shipping models that would use partial autonomous features. This would ease some of the burden on drivers and possibly create new jobs in maintenance, remote management, fleet management and operations in the process. We will still need human drivers for a long time. Even the Ottomotto model needed human guidance to steer off the highway at the Colorado Springs exit. There is still a long way to go before fully autonomous trucks become a reality and there are a lot of regulatory hurdles left to jump over.

During the transition, OEMs can partner with established trucking companies to create the next generation of vehicles – ones that will incorporate self-driving and autopilot functions but would still need human drivers. This will be a massive technological undertaking, of course, and will require Over-The-Air (OTA) software updating capabilities so that vehicles can be continuously improved as new technological advancements are developed. By partnering with companies that excel in OTA technology, OEMs will be able to embrace the future by keeping themselves at the forefront of this shifting industry.

As the auto industry is changed by technological and economic currents, OEMs and Tier-1 manufacturers will need to partner with technological specialists to thrive in the era of the software defined car. Movimento’s expertise is rooted in our background as an automotive company. This has allowed us to create the technological platform that underpins the future of the software driven and self-driven car. Connect with us today to learn more about how we can work together.